Better-off pensioners should voluntarily pay back their taxpayer-funded
benefits, the Work and Pensions Secretary declares.

Iain Duncan Smith says he “would encourage” elderly people who can well afford to pay for their their own heating bills, bus passes and television licences to return the money to the state.

His intervention comes after David Cameron vetoed efforts by some ministers - including Mr Duncan Smith - to stop paying the benefits to all pensioners, no matter how wealthy, while the rest of the welfare budget is being squeezed.

Mr Duncan Smith previously called the £2billion-a-year universal payments regime an “anomaly”. However, in an interview with The Sunday Telegraph today, he says there are “no plans to change it”.

Instead, he urges the better off simply to repay the money to the Treasury. He says: “It is up to them, if they don’t want it, to hand it back.

“I would encourage everybody who reads the Telegraph and doesn’t need it, to hand it back.”

The future of the pensioner payments has already sparked a fierce political row with Nick Clegg, the Deputy Prime Minister, claiming they are “difficult to explain” at a time of spending cuts.

Vincent Cable, the Liberal Democrat Business Secretary, has called for the payments to be taxed, arguing that this would allow ministers to claw back hundreds of millions of pounds while avoiding the need for expensive and bureaucratic means-testing.

The winter fuel allowance is worth £200 to state pensioners, or £300 to the over-80s. On reaching 60, prescriptions become free and concessionary bus travel is offered at state pension age, with the level of concession varying across the country. At 75, pensioners receive free television licences, worth £145.50 for colour sets.

Mr Cameron, who pledged at the 2010 general election to protect the benefits for a whole parliament, is understood to have ruled out any move against them in the Conservative manifesto for the 2015 contest.

The Prime Minister is said to be unwilling to go into an election campaign armed with a vote-loser among the elderly, the age group most likely to turn at polling stations and whose ranks contain many natural Tory supporters.

Mr Duncan Smith says: “I’ve no idea what we will put into the manifesto...I have no indication of change. It’s fair to say that [pensioners] are more vulnerable than others and we need to be very careful about what and when we do things, if we ever do.”

In the interview, the Work and Pensions Secretary also hit out at the BBC over its coverage of his major welfare reforms, including the way the corporation has reported ministers’ moves to remove extra benefit payments for households with bedrooms which are not being used.

BBC reports echoed Labour in referring to the “bedroom tax” rather than ministers’ preferred description of a “spare room subsidy” which they were bringing to an end.

“We’ve had a lot of moments with the BBC,” Mr Duncan Smith says, while accusing the corporation of “misrepresenting” the reforms.

“They have always tended to to look at the welfare reforms from the jar that is marked, and it’s a very leftist jar, 'less money bad, more money good’. So if you are reducing welfare you must be doing something rather nasty.”

He says, however, of BBC reporting: “I think a lot of times it’s more lazy than politically motivated.”

Tomorrow (MON) see the start of pilot projects for Universal Credit, the flagship reform which will wrap up several different working age benefits into a single payment - with the eventual aim of ensuring nobody is better off out of work than they are in a job.

The system has been criticised for delays and concerns have been expressed that complex IT systems will not work properly. Labour has claimed the project is “on the edge of disaster.”

However, Mr Duncan Smith says: “The whole programme is a four year implementation programme. There is a reason for that, because you know I want to get these things right.”

He labels the flagship reform a “big “cultural shift” which will see claimants, for the first time, sign a contract pledging to make themselves available for work, attend interviews and take the first job which comes up.

He adds: “We want to say to people, you’re claiming unemployment benefit but you’re actually in work paid for by the state: you’re in work to find work. That’s your job from now on: to find work.”

Mr Duncan Smith suggests he is well on the way to identifying the extra £6.5billion of cuts to the welfare budget he has been asked to find by George Osborne, the Chancellor, for 2015-16.

Some of his Conservative cabinet colleagues, including Theresa May, the Home Secretary, Chris Grayling, the Justice Secretary, and Philip Hammond, the Defence Secretary, have called for further welfare savings to be made on top of this so that their own departmental budgets can be protected.

Mr Duncan Smith says in a sideswipe at them: “”Instead of always talking about it, it would be nice if occasionally they’d talk about what we’ve actually achieved.

“I always say to my colleagues, I’m happy to open my books for you guys to come and chat to me about things, but I think we’ve made phenomenal progress in reforming welfare, doing it in a way which is fair - fair to tax payers, fair to those who try, that’s the key element.